Action in ETFs is a window on the investment world in general, ConvergEx’s Colas says.
The global ETP industry is on a roll, and U.S. assets could hit $2 trillion by 2013.
J.P Morgan, which filed for the first-ever physical copper exchange-traded fund in October, submitted its second amended set of registration documents for the proposed fund with the Securities and Exchange Commission earlier this week.
The company hasn't yet revealed a ticker or an expense ratio for its proposed copper fund. However, some of the new language in the amended documents provides a glimpse into the unique administrative aspects of running a fund backed by a physical commodity.
J.P. Morgan's fund is designed to give investors exposure to the spot price of copper, a material in increasing demand as emerging economies such as China and India develop their infrastructure. Many investors view copper, which is used in electricity transmission grids and telecommunications infrastructure, as a bellwether for the global commodity.
Currently, investors looking for copper exposure only have miner's funds, such as the Global X Copper Miner's ETF (NYSEArca: COPX) or First Trust's ISE Global Copper Index Fund (NasdaqGM: CU). The iPath Dow Jones-UBS Copper Subindex Total Return ETN (NYSEArca: JJC) tracks copper futures.
JJC’s price has risen more than 30 percent in the past year. The ETN had $257.1 million in assets as of Jan. 27, according to data compiled by IndexUniverse.com.
The fund's net asset value, for instance, will be computed daily using the official settlement price per metric ton of Grade A Copper on the London Metals Exchange, plus a weighted average "locational premium" for the fund's copper held in its various warehouse locations.
The trust is permitted to hold copper in warehouses in the Netherlands, Singapore, South Korea and the United States. In its latest paperwork, J.P. Morgan removed references to warehouses in Germany, Belgium, Italy, Spain and the United Arab Emirates.
To create shares, which must be in blocks of 2,500, authorized participants must take delivery of at least 25 metric tons of copper to the fund's authorized warehouse-keeper.
Pax World, the Portsmouth, N.H.-based money management firm focused on so-called sustainable investing
NYSE Euronext, the parent of the largest U.S.-based ETF trading platform, NYSE Arca, said this week that it was the worldwide leader in new exchange-traded product listings in 2010, a year of both robust growth and soul-searching for the ETP industry.
Bumps in the road notwithstanding, Wharton’s Siegel sees further stock gains.
The U.S. economy may be turning a corner, Vanguard cautiously predicts.
Vanguard yanks three muni bond ETFs from registration—for now.
Rising oil prices rear their head, as short interest in energy ETFs declines.